Homeownership on the decline among american families with childrenMortgagePress.comhomeownership rates, Center for Housing Policy, the National Housing Conference
Although homeownership in the U.S. has soared to record highs,
the rate for all families with children is actually lower than it
was in the 1970s, according to a new study entitled Working
Families With Children: A Closer Look at Homeownership Trends.
Conducted by the Center for Housing
Policy, the research affiliate of the National Housing Conference (NHC),
the study also found that low- to moderate-income working families
with children have experienced a particularly large decline in
homeownership over the last two and one-half decades. These
findings are at odds with what has been hailed as a decade of
progress for the average American household, and point to the fact
that working families with children, in particular, are
increasingly struggling to make ends meet.
Specifically, the homeownership rate for all families with
children was 70.5 percent in 1978, but by 2001, this rate decreased
to 68.4 percent. Among working families with children, the
homeownership rate declined from 62.5 in 1978 to 56.6 percent in
2001. For comparison, 68.3 percent of all households owned their
homes in 2003, increasing from 65.2 percent in 1978. Working
families are defined as households earning less than 120 percent of
the local median income, but more than the full-time equivalent of
the minimum wage. The net decrease in the homeownership rates of
working families with children that occurred between 1978 and 2001
translates into a more than eight percent decline from nearly 66
percent to about 58 percent in the proportion of low- to
moderate-income children living in owner-occupied housing.
These findings ultimately stretch beyond the housing market
since extensive expert research has proven that children who live
in owner-occupied homes are more likely to do well in school and
are less likely to have behavioral problems. The overall impact of
homeownership on children also appears to be even stronger among
lower income families.
The reduction in homeownership among working families with
children occurred at the same time that their number, and their
relative importance, were on the rise. In particular, the number of
working families with children rose from 11.9 million in 1978 to
17.5 million in 2001. During that time, their share of all U.S.
households also increased from 15.4 percent to 16.4 percent.
The decline in the homeownership rate of working families cannot
be explained simply by the increase in single-parent households. In
fact, homeownership among couples with children also fell, dropping
from 66.8 percent in 1978 to 63.2 percent in 1991 before reaching
64.2 in 1999. In 2001, the rate was 65.5, still below its pre-1980s
level. In addition, the homeownership rates of both single parents
and couples declined, so the decline cannot be attributed solely to
changes in household type. It is likely that stagnant incomes and
the rising costs of homeownership played important roles.
In terms of the ability of working families with children to
achieve homeownership, the level of home pr ices over the period
tells part of the story. According to Census data, the median sales
price of a new home in 1978 was $55,700, which was about four times
the $14,258 median income of a working family with children. In
2001, the median new home cost more than $175,000 or five times the
median income of $35,000. The fulltime minimum wage in 1978 was
$5,512. By 1991, it had risen to $8,840 and by 1999, it was
For more information, visit www.nhc.org.